2001 Montana Legislature

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SENATE BILL NO. 92

INTRODUCED BY M. HALLIGAN

Montana State Seal

AN ACT EXTENDING THE TERMINATION DATE FOR THE INCOME AND CORPORATE TAX CREDIT FOR RECYCLING OF MATERIAL AND THE INCOME AND CORPORATE TAX DEDUCTION FOR THE PURCHASE OF RECYCLED MATERIAL; REMOVING SOIL CONTAMINATED BY HAZARDOUS WASTES FROM THE DEFINITION OF "RECLAIMABLE MATERIAL"; DELETING THE RESTRICTION ON DEPRECIABLE PROPERTY THAT TREATS SOIL CONTAMINATED BY HAZARDOUS WASTES; AMENDING SECTIONS 15-32-601, 15-32-602 AND 15-32-603, MCA, SECTION 9, CHAPTER 712, LAWS OF 1991, SECTIONS 4 AND 5, CHAPTER 542, LAWS OF 1995, AND SECTION 1, CHAPTER 411, LAWS OF 1997; AND PROVIDING AN APPLICABILITY DATE.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:



     Section 1.  Section 15-32-601, MCA, is amended to read:

     "15-32-601.  (Temporary) Definitions. For the purposes of this part, unless otherwise required by the context, the following definitions apply:

     (1)  "Collect" means the collection and delivery of reclaimable materials to a recycling or reclaimable materials processing facility.

     (2)  "Postconsumer material" means a product or packaging material that has served its final intended use, that has been discarded by an individual, commercial enterprise, or other entity after having fulfilled its intended application or use, and that is usually thrown away and hauled to landfills. This term does not include wastes generated during production of an end product.

     (3)  "Process" includes but is not limited to the treatment of hazardous wastes as defined in 75-10-403.

     (4)  (a) "Reclaimable material" means:

     (i)  material that has useful physical or chemical properties after serving a specific purpose and that would normally be disposed of as solid waste, as defined in 75-10-203, by a consumer, processor, or manufacturer; or

     (ii) soil that has been contaminated by hazardous wastes to the extent that treatment of those wastes is required as defined in 75-10-403.

     (b)  Except for claiming a tax credit as provided in 15-32-603(1)(d), material may not be considered reclaimed by the consumer, processor, or manufacturer that generated the material.

     (5)  "Recycled material" means a substance that is produced from reclaimed material as provided in 15-32-609. (Terminates December 31, 2001--sec. 1, Ch. 411, L. 1997.)"



     Section 2.  Section 15-32-602, MCA, is amended to read:

     "15-32-602.  (Temporary) Amount and duration of credit -- how claimed. (1) An individual, corporation, partnership, or small business corporation, as defined in 15-31-201, may receive a credit against taxes imposed by Title 15, chapter 30 or 31, for investments in depreciable property to collect or process reclaimable material or to manufacture a product from reclaimed material, if the taxpayer qualifies under 15-32-603.

     (2)  Subject to 15-32-603(3) and subsection (4) of this section, a taxpayer qualifying for a credit under 15-32-603 is entitled to claim a credit, as provided in subsection (3) of this section, for the cost of each item of property purchased to collect or process reclaimable material or to manufacture a product from reclaimed material only in the year in which the property was purchased. If qualifying property was purchased prior to January 1, 1992, but on or after January 1, 1990, a taxpayer is entitled to a credit for tax year 1992.

     (3)  The amount of the credit that may be claimed under this section for investments in depreciable property is determined according to the following schedule:

     (a)  25% of the cost of the property on the first $250,000 invested;

     (b)  15% of the cost of the property on the next $250,000 invested; and

     (c)  5% of the cost of the property on the next $500,000 invested.

     (4)  A credit may not be claimed for investments in depreciable property in excess of $1 million. (Terminates December 31, 2001--sec. 1, Ch. 411, L. 1997.)"



     Section 3.  Section 15-32-603, MCA, is amended to read:

     "15-32-603.  (Temporary) Credit for investment in property used to collect or process reclaimable material or to manufacture a product from reclaimed material. (1) The following requirements must be met to be entitled to a tax credit for investment in property to collect or process reclaimable material or to manufacture a product from reclaimed material:

     (a)  The investment must be for depreciable property used primarily to collect or process reclaimable material or to manufacture a product from reclaimed material.

     (b)  (i)  The taxpayer claiming a credit must be a person who, as an owner, including a contract purchaser or lessee, or who pursuant to an agreement owns, leases, or has a beneficial interest in a business that collects or processes reclaimable material or that manufactures a product from reclaimed material. For the purposes of this section, a business qualifies as a business that collects reclaimable material if it gathers reclaimable material for later sale or processing for another business that has as its primary business function the collection or processing of reclaimable material or the manufacture of a product from reclaimed material. The collection of reclaimable material may be a minor or nonprofit part of a business otherwise engaged in a retail trade or other business activity.

     (ii) The taxpayer may but need not operate or conduct a business that collects or processes reclaimable material or manufactures a product from reclaimed material. If more than one person has an interest in a business with qualifying property, they may allocate all or any part of the investment cost among themselves and their successors or assigns.

     (c)  The business must be owned or leased during the tax year by the taxpayer claiming the credit, except as otherwise provided in subsection (1)(b), and must have been collecting or processing reclaimable material or manufacturing a product from reclaimed material during the tax year for which the credit is claimed.

     (d)  The reclaimed material collected, processed, or used to manufacture a product may not be an industrial waste generated by the person claiming the tax credit unless:

     (i)  the person generating the waste historically has disposed of the waste onsite or in a licensed landfill; and

     (ii) standard industrial practice has not generally included the reuse of the waste in the manufacturing process.

     (2)  A credit for depreciable property that treats soil contaminated by hazardous wastes applies only to property that treats contaminated soil and not to auxiliary property.

     (3)  A credit under this section may be claimed by a taxpayer for a business only if the qualifying property is purchased before January 1, 2002.

     (4)(2)  The credit provided by this section is not in lieu of any depreciation or amortization deduction for the investment or other tax incentive to which the taxpayer otherwise may be entitled under Title 15.

     (5)(3)  A tax credit otherwise allowable under this section that is not used by the taxpayer in the taxable year may not be carried forward to offset a taxpayer's tax liability for any succeeding tax year.

     (6)(4)  The taxpayer's adjusted basis for determining gain or loss may not be further decreased by any tax credits allowed under this section.

     (7)(5)  If the taxpayer is a shareholder of an electing small business corporation, the credit must be computed using the shareholder's pro rata share of the corporation's cost of investing in equipment necessary to collect or process reclaimable material or to manufacture a product from reclaimed material. In all other respects, the allowance and effect of the tax credit apply to the corporation as otherwise provided by law. (Terminates December 31, 2001--sec. 1, Ch. 411, L. 1997.)"



     Section 4.  Section 9, Chapter 712, Laws of 1991, is amended to read:

     "Section 9. Termination. [This act] terminates December 31, 1995 2005."



     Section 5.  Section 4, Chapter 542, Laws of 1995, is amended to read:

     "Section 9. Termination. [This act] terminates December 31, 1995 2005."



     Section 6.  Section 5, Chapter 542, Laws of 1995, is amended to read:

     "Section 5. Termination -- exception. (1) [Sections 1 through 3] terminate December 31, 1997 2005.

     (2) Not withstanding subsection (1), 15-32-603(3), as numbered by [this act], which reads: "A credit under this section may be claimed by a taxpayer for a business only if the qualifying property is purchased before January 1, 1998 2006.", is deleted in its entirety on December 31, 1997 2005."



     Section 7.  Section 1, Chapter 411, Laws of 1997, is amended to read:

     "Section 5. Termination -- exception. (1) [Sections 1 through 3] terminate December 31, 1997 2005.

     (2) Not withstanding subsection (1), 15-32-603(3), as numbered by [this act], which reads: "A credit under this section may be claimed by a taxpayer for a business only if the qualifying property is purchased before January 1, 1998 2006.", is deleted in its entirety on December 31, 1997 2005."



     Section 8.  Applicability. [This act] applies to tax years beginning after December 31, 2001.

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